Water Risk Monetizer

Developed by Ecolab in partnership with Trucost and Microsoft, the Water Risk Monetizer provides actionable information to help businesses understand water-related risks and quantify risks in financial terms to inform responsible decisions that enable growth. The tool is available to the public at no cost at www.WaterRiskMonetizer.com.

The Water Risk Monetizer is a financial modeling tool that provides a new way for businesses to factor water scarcity into decisions that support business growth and help ensure the availability of fresh water for future generations.

Helping businesses understand water-related risks

Water scarcity threatens business vitality in regions around the world, making smart water management a business imperative. The Water Risk Monetizer helps companies understand the impact of declining water quantity and quality and provides actionable information that helps them turn water risk into business strategy that enables growth.

In much of the world, water is undervalued and underpriced, and as a consequence, businesses often overlook its actual value to operations. Water risks, ranging from rationing and price increases to insufficient quality and increasing regulations, can disrupt operations, threaten product quality, increase expenses and curtail growth. The overall cost of these risks can far exceed the price paid for water but are usually not factored into a company’s water bill.

To operate successfully in a water-scarce environment, businesses must integrate water management into business strategy and planning. However, the disconnect between market price and risk makes it hard to justify investing in solutions to water-related challenges, or to make optimal decisions about locating or expanding operations. The Water Risk Monetizer can with data and information to help companies monetize water-related business risks and understand the gap between what they pay for water today and the potential costs of water risks..

The Water Risk Monetizer is an easy-to-use tool designed to help businesses quantify in monetary terms the water risks related to water availability and quality. This first-of-its kind, publicly available financial modelling tool uses readily available information about water use, water costs, water quality, revenue and production projections at a facility level to calculate the full value of incoming and outgoing water based on local water scarcity. The calculation takes into account tangible factors such as scarcity and quality as well as less tangible human, health and environment impacts of water use in a particular area to determine risk levels and display risks in comparison to current water costs.

Making the complex simple

Assessing the value of water – and the financial risk of water scarcity now and in the future, at one site and across an enterprise – is complex, involving multiple factors. The Water Risk Monetizer transforms the complexities into clear, straightforward assessments and translates risks into the language of business: monetary impact.

Best-in-class local water basin datasets, economic techniques and scientific methodologies developed by Trucost enable business to monetize water-related business risks. The tool provides a comprehensive series of risk metrics to help businesses understand incoming (quantity and quality) risks and outgoing (quality) risks.

The assessment of the full value of water at a site level reflects:

Incoming water risks: monetary value of the impacts of water use on human health and ecosystems and the future costs of incoming water treatment

Outgoing water risk: monetary value of the impacts of outgoing water pollution on human health and ecosystems and the future costs of water treatment

Potential revenue at risk: monetary value of the impacts of water use versus availability based on water required to do business

Enterprise risk profile: assessment of each facility’s risk based on three-year projected output growth and location-specific water stress

Make the case for proactive water management strategies by utilizing risk-adjusted costs to demonstrate potential risk-based return on investment compared to conventional modeling using only market water costs

Identify operations/locations at greatest risk based on quantity and quality risks and growth projections

Prioritize water conservation and reuse investments based on site-specific water risks

Select where and how to increase production

Determine where to expand to meet demand

Support development of a successful corporate water strategy: prioritize actions, minimize risk, maximize performance and optimize costs by reducing, reusing and recycling water

The Water Risk Monetizer does not predict whether water risks will be realized by the water user. The water risk premium and revenue at risk assessment should be used as data points in a comprehensive risk assessment process and are intended to be refined based on local conditions and business particulars.

Developed by Ecolab in partnership with Trucost and Microsoft

The Water Risk Monetizer was launched in 2014, developed by Ecolab, a global leader in water technologies and services; Trucost, part of S&P Dow Jones Indices, a global leader in valuing natural capital; and Microsoft, the leading platform and productivity company for the mobile-first, cloud-first world. Through this collaboration, the tool leverages industry insights, advanced analytics and Azure Cloud technology to help business leaders easily access information to better understand the impacts of water scarcity.

Water Risk Monetizer Website

Go to the Water Risk Monetizer website to learn more and access the tool.

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